Small U.S. Businesses Face An Uncertain, Possibly Tumultuous Summer

Small businesses in the United States that rely on outdoor crowds and free-spending tourists are unsure what to expect this summer.

Photo Insert: While consumers are likely to have a lot of pent-up demand, they are also facing significant financial challenges as a result of the highest inflation in decades.

After more than two years of the pandemic, consumers are likely to have a lot of pent-up demand. However, they are also facing significant financial challenges as a result of the highest inflation in decades. And COVID-19 is still a threat, Mae Anderson reported for the Associated Press (AP) on June 10, 2022.

According to the US Travel Association, an industry trade group, money spent on travel in the US excluding business travel will total $726 billion in 2022, up 3% from 2021 and slightly higher than pre-pandemic levels.

Many Americans appear to be eager to spend what remains of their pandemic savings. However, inflation could derail their plans. Increased prices make day-to-day living more expensive, potentially leaving less money for discretionary spending.

Gas prices are up more than 60% from a year ago, and hotel rooms and airfare are also more expensive, putting strain on travel budgets.

Memorial Day weekend may provide a preview of how the summer will unfold. During the five-day holiday period from Thursday to Monday, an average of 2.23 million people passed through US airport checkpoints, according to the Transportation Security Administration.

That was 9% lower than the same five days in 2019, but 24% higher than the same five days last year. Businesses are also dealing with inflation, as raw materials and finished goods become more expensive, and workers demand higher wages.

Owners have been forced to raise prices or reduce services.

“It’s a summer of uncertainty,” said Ray Keating, chief economist with advocacy group the Small Business & Entrepreneurship Council. “Inflation is a major worry and tied to that is increases in costs small businesses are seeing from their own vendors and suppliers. There’s a tight labor market. It’s a tough mix.”

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic